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Two primary messages appear to have been at the heart of this recent testimony. First, as Ms. Maxwell indicated, the incompleteness of Medicaid data limits the utility of programs by which HHS identifies Medicaid overpayments, detects false claims, recoups government money and establishes criminal cases against those who perpetrate fraud. In other words, to the extent these fraud detection programs have failed, the message is that the fault lies not with the programs themselves, but with the data on which they depend. Second, Ms. Maxwell argues that if the quality of Medicaid data is not improved, the government will continue to lay out money on programs for which “limited results” are “trickling out.” Given the current focus in Washington on eliminating wasteful spending, this attention to maximizing the value of every dollar spent is neither surprising nor unjustified.

And yet, upon reading Ms. Maxwell’s testimony, another vastly different but no less important point emerges: inaccurate Medicaid claims data can wreak havoc on innocent medical providers. Indeed, for those who counsel health care providers, Ms. Maxwell’s recent testimony is noteworthy not just for what it says about the (in)accuracy of Medicaid data, but also for what it reveals about the extent to which providers have been and will continue to be subjected to unjustified, burdensome and meritless government scrutiny.

Where in the Congressional testimony about flawed Medicaid reporting does this issue emerge? Ironically enough, the answer lies in the data. In her testimony, Ms. Maxwell provides telling statistics regarding the results of an anti-fraud effort known as the National Medicaid Audit Program (“NMAP”). Based on the tracking of six months’ worth of cases assigned for potential Medicaid audits under NMAP, Ms. Maxwell reports that 113,378 health care providers were believed to have received overpayments totaling $282 million. However, after initiating audits of 161 of these providers, the government found that only 25 of the providers had received overpayments totaling a mere $285,629. Of the rest, 102 providers had received no overpayments at all, and 34 audits were still being completed.

To HHS, at least, the takeaway from these statistics is that deficient Medicaid data is hindering anti-fraud efforts and causing fraud-detection programs to “yield[] a negative return on investment.” Yet nowhere in Ms. Maxwell’s testimony is there any discussion of the fact that, as a result of the NMAP program, over 100 medical providers were subjected to burdensome, expensive audits that failed to turn up a single overpayment. In fact, in order for the government to recoup hardly more than $250,000, a significant number of providers were forced to undergo audits that demonstrated not even one improper claim. And these unnecessary audits did not just waste taxpayer dollars or needlessly divert the attention of enforcement agencies. Instead, as a result of faulty Medicaid data, medical providers bore the disruption and costs that come from compiling the records demanded, lived with the stress and uncertainty of an intrusive government audit, and confronted the fear that an unjustified audit could result in an even more unjustified law enforcement referral.

A reminder of basic principles thus appears in order. Ensuring the quality of Medicaid data undoubtedly can help fraud-detection programs yield a positive return on investment, and also can assist the government in its efforts to detect those who are committing fraud. But innocent medical providers must be protected as well, especially given the extensive administrative and compliance burdens that many providers already face. Unjustified audits based on faulty data only serve to aggravate these problems, and as our health care regulators deal with the problems of inaccurate Medicaid data, they would do well to keep this side of the issue firmly in mind.

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